Morning Briefing Global Edition

Steel's Cold Reality

The president of the World Steel Association, Wolfgang Eder, has a good grasp of reality. He wants free markets to fix his industry’s problems, not government. “We must muster the courage to close sites,” he said in an interview with Handelsblatt. According to Eder, who runs Austrian steelmaker Voestalpine, the E.U.’s annual production capacity is about 200 million tons, when all that’s needed is 150 to 170 million. Eder’s motto: “It makes no sense to wait until you go bust.”

 

If Germans didn’t vote every four years, the term “tax cut” probably would fall out of circulation. But general elections next year already have politicians falling over themselves to offer voters relief. Finance Minister Wolfgang Schäuble says he can slash taxes by €12 billion a year; a business group thinks €32 billion is possible. The pro-business Free Democrats are promising €36 billion by eliminating, among others, the hated post-reunification “solidarity tax.” But they’re all forgetting that cuts in taxes mean cuts in programs. If it’s the job of politicians to pull a rabbit out of a hat, it’s up to the parliamentarians who approve the budget to stuff it back in.

 

The former CEO of utility RWE once said solar power production in cloudy Germany made as much sense as “growing pineapples in Alaska.” But his successor, Peter Terium, yesterday announced the purchase of a solar power and battery maker, proving there is no alternative to alternative energy, even for the biggest producers. This only goes to show that sometimes the light at the end of the tunnel comes from an unexpected source.

 

Everybody is talking about a fourth term for Chancellor Angela Merkel, but the numbers may not add up. Just look at the 1,260-member Federal Assembly, the body that elects Germany’s largely ceremonial president. Merkel’s Christian Democrats and Bavaria’s Christian Social Union have only 546 seats. That has fed speculation about a rival coalition of Social Democrats, Leftists and Greens, which would have 100 seats more. The old maxim is that strong personalities, not numbers, elect leaders. But if that were true, we would have never ended up with underwhelming presidential figures like Christian Wulff and Joachim Gauck.

 

Britain’s The Guardian newspaper is getting some grief in Berlin for a recent column predicting Deputy Finance Minister Jens Spahn would be the man to replace Angela Merkel as chancellor next year. Of course, this is not going to happen. But there’s no question the 36-year-old finance wiz is worthy of attention. Spahn is one of the few natural talents in the Christian Democrats – eloquent, educated, empathetic and equipped with a well-honed instinct for power. His rise is inevitable. The Guardian may not have erred in its choice of successor, just in its timing.

 

Image of the Day

Notting Hill_Reuters
Police enjoy the show during the Notting Hill Carnival in London, one of Europe’s biggest street festivals. Source: Reuters
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